The world needs to act immediately with transformative policies to realize a sustainable energy transition. Professor Shawn Mu, an energy economist from the University of Dundee, Scotland, emphasized how the evolution of energy consumption triggered by industrialization since the 19th century has harmed the earth.
“The current increase in global energy consumption is like a ticking time bomb,” said Shawn while giving a guest lecture entitled “Economics of Energy Transition” organized by the SBM ITB on Thursday (20/2).
Shawn, who is also the Director of the Center for Energy, Petroleum, and Mineral Law and Policy (CEPMLP) at the University of Dundee, cautioned the SBM ITB students and faculty that excessive fossil fuel consumption jeopardizes the planet’s survival unless it is urgently balanced with a major shift towards low-carbon energy. While progress has been made, with 15% of global energy consumption now derived from clean energy sources, Shawn stressed that this percentage remains insufficient.
Shawn then highlighted the paradox between the superior energy density of fossil fuels and the urgent need to switch to clean energy. He compared the energy density of petroleum, which far exceeds biomass, and the advantages of gasoline or diesel, which have an energy density of 50 to 100 times greater than lithium-ion batteries.
“Electric vehicles are significantly more efficient than gasoline-powered cars, achieving an efficiency rate of 77 percent compared to just 12-30 percent for traditional vehicles. However, reliance on batteries presents a challenge that must be addressed,” he explained.
According to Shawn, the rise in global temperatures is concerning, as 18 of the 19 hottest years on record have occurred since 2001. The energy sector contributes to 73.2% of global greenhouse gas emissions.
“The most effective climate policies are those that maximize the net social benefits of carbon,” he stated.
Amid the enormous challenges in the energy transition, Shawn conveyed hope. He referred to the BP Energy Outlook 2023 projections that describe various energy transition scenarios until 2050 and the global electrification trend that continues to strengthen. Lithium-ion batteries’ decreasing cost is also a positive catalyst for developing clean energy.
However, Shawn did not deny the complexity of the energy transition, including the policy implications and global market dynamics involved. He cited the views of Kenneth Rogoff, an economist and chess grandmaster from the United States, regarding the potential for the United States’ energy plan to hamper green movement initiatives in Europe, as well as the performance of international oil company shares that continue to be of concern to market players.
“The energy transition is no longer just an option but an inevitability that cannot be avoided,” said Shawn.
He emphasized the urgency to balance sustainable economic growth with the climate change agenda, primarily focusing on climate change mitigation, renewable energy development, and electrification as key pillars.
